Ether options’ implied volatility outpaces bitcoin options as traders eye spot ETFs rollout

The higher implied volatility in ether ( ETH -1.37% ) options compared to bitcoin options indicates that traders are anticipating increased price fluctuations for ether, possibly in response to the upcoming launch of a spot ETH exchange-traded funds, analysts say.

According to a report from QCP Capital on Tuesday, anticipation surrounding the upcoming launch of spot ether ETFs is currently the main driver of the cryptocurrency market, and this is reflected in the implied volatility (IV) of ether options, which is significantly higher than the IV for bitcoin . Implied volatility in this case is market's forecast of a likely movement in price for ETH. 

"Bullishness is likely to continue as the market waits for the spot ether ETF to usher in new demand, with the options market certainly reflecting this, with ether vols [IV] still trading 15% over bitcoin vols," QCP Capital analysts said.

Ether options implied volatility higher than that for bitcoin

This observation aligns with The Block's Data Dashboard , which indicates that the current levels of implied volatility for at-the-money (ATM) ether options have remained elevated since the U.S. Securities and Exchange Commission (SEC) approved spot ether ETFs on Thursday, May 23.

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In contrast to this, using the Deribit Volatility Index, which measures the market's expectation of future volatility for bitcoin over the next 30 days, the  Block's Data Dashboard  shows that implied volatility for bitcoin has dropped significantly since mid-May.

Although the SEC approved spot ether ETFs in mid-May, unlike bitcoin ETFs , which began trading the day after approval, ether ETFs may not begin trading on exchanges for several weeks or even months.

Ether's price slid slightly by 1.3% over the past 24 hours and was changing hands for $3,762 at 7:57 a.m. ET, according to The Block’s Price Page .  The GM 30 Index , representing a selection of the top 30 cryptocurrencies, decreased by 0.34% to 145.09 in the same period.